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Missing: Specialty Apparel Retailers
With the most to gain from item-level tagging, why aren’t these retailers giving RFID the attention it deserves?
Absence of a “burning platform.” In the mass merchant vertical, Wal-Mart’s mandate has forced its suppliers—and competitors—to begin deploying RFID and integrating it into their business operations. But there is no equivalent “burning platform” in the specialty vertical, where retailers control their own destiny and are not subject to mandates. The retailer most likely to influence activity in this sector is GAP Inc., but this company has been surprisingly inactive since its initial RFID pilot back in 2001, despite the fact that it achieved positive business results. If GAP were to invigorate its RFID activity substantially, it would not exert pressure on retailers that do not compete directly with them.
A dearth of reports on the success of early adopters. Some excellent results have been observed in the first wave of item-level store pilots, but much of the data has not been made publicly available. Two notable exceptions are Marks & Spencer and Levi Strauss & Co., and both deserve credit for their willingness to share their experiences with peer companies. The absence of published reports might lead some executives to form the incorrect conclusion that RFID is not technically reliable or economical, or that it’s too difficult to deploy. It also leaves executives in the dark about the degree to which RFID investigation and planning are being conducted by other retailers.
Misunderstanding the RFID articles that have been published. Just like a sculptor has a large array of chisels to work with, RFID applications come in many forms. Pallet, case and item-level deployments are very different, and much depends on the merchandise category and retail format in which the deployment occurs. Many of these nuances are not readily apparent to the RFID beginner, and conclusions drawn in one context often have little bearing on others. When approached to discuss RFID, the CIO of one specialty apparel chain recently declared, “I know all about RFID; that’s the Wal-Mart thing.” In his case, RFID really is the “Levis and Marks & Spencer thing.”
Lack of CEO awareness. RFID is an inherently cross-functional initiative with a significant financial upside. And yet, too often it is viewed simply as a technology trend—something to be monitored by the IT department and managed by the CIO—rather than a pivotal strategic opportunity that ought to be seized by the company. Alarmingly, store operations organizations, which arguably stand to benefit the most from early stage RFID deployment, typically know virtually nothing about the technology. One retail IT executive confided, “We wouldn’t let store operations attend an RFID conference without us because we know that RFID is something they will want.” There is very little incentive for any individual department to elevate RFID single-handedly on the corporate agenda, and we know of several instances where corporate politics is freezing the pace of RFID activity. A “sell side” analyst at a major investment bank recently observed, “Unless you start with the CEO, you will be wasting a lot of time.” Sadly, as many RFID vendors can attest, this has too often proven to be the case.
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